Step 1Crush the peppercorns in a plastic bag with a mallet or in a mortar and pestle. Combine with the salt and rub the filets with the mixture.
Step 2Heat the oil in a saute pan over high heat until just smoking. Sear the filets for 3 to 4 minutes per side (for rare) and let rest on a cutting board for 5 to 10 minutes.
Step 3Add the shallots and mushrooms to the same pan, with a teaspoon of oil if necessary. Saute over medium-high heat until the vegetables color, about 3 to 4 minutes. Remove from the heat, then add the wine and the demi-glace. Return to the stovetop and cook over medium heat. Simmer 3 to 5 minutes to reduce slightly. Cut the steak thinly on a diagonal and fan out on a plate with the watercress.
Step 4When the liquid is reduced, remove the pan from the heat and immediately add the Cognac. Ignite and gently swirl the pan. Spoon the sauce over the steaks and serve.